Natural gas: stay the course

January 19, 1983

The chorus of complaints reaching congressional offices about natural gas prices is not hard to understand. Consider the anomaly: Gas supplies are high, usage is down - and yet prices continue to rise. All told, they will shoot upward by 25 percent this winter, according to the US Department of Energy. Given that fact, last year's calls by producers for stepping up the decontrol of gas now scheduled for 1985 have been put on the back burner and replaced by calls for new controls - or at least a freeze on prices.

What is going on here? And what should Congress and the Reagan administration do?

To begin with, it is important that the general public and lawmakers understand why gas prices have momentarily defied conventional laws of supply and demand and taken a sharp turn upward. This has come about mainly because many interstate pipeline contractors committed themselves to buying gas at high prices back when demand was high. But Energy Department analysts do not expect prices to increase all that much more in the next year as present contractual obligations are met. So it is essential that the new Congress - which is expected to be far more ''consumer-oriented'' than its predecessor - not overreact and compound the present price-hike difficulties by slapping new controls back on gas.

The primary objective should remain that envisioned by lawmakers when the Natural Gas Policy Act (NGPA) was enacted in 1978 and set the stage for a phased decontrol extending up to 1985, when market conditions would be allowed to prevail for new gas discovered after 1978. Full deregulation will eventually come as old gas, discovered before 1978, is used up.

The decontrol goal remains as crucial now as in 1978; namely, to encourage exploration and boost US energy supplies.

In making a case for imposing new regulatory controls on gas, consumer groups argue that a price ''shock'' will occur in 1985 when final controls are lifted on new gas. Yet such a shock did not occur when President Reagan lifted remaining regulations on oil a week after taking office. The hike was quickly absorbed throughout the economy. And, of course, prices have subsequently fallen because of world recession. The important point is that, given current high supplies, the decontrol process now underway should proceed without any substantial risk to consumers.

That said, it should also be noted that, given the recession, this would hardly seem the moment for an immediate and total decontrol, as some administration officials urge. It would be more prudent to let the NGPA process go ahead on schedule. Finally, Congress might consider increasing the amount of money available for emergency fuel assistance, and states would seem to have a responsibility in taking all steps to ensure that supplies are not cut off to any person in need. Decontrol is essential to the nation's long-range energy security. But decontrol should not be allowed to come at the cost of injury to any family or individual temporarily unable to pay a fuel bill.